Correlation Between 70082LAB3 and AngloGold Ashanti

Can any of the company-specific risk be diversified away by investing in both 70082LAB3 and AngloGold Ashanti at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 70082LAB3 and AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US70082LAB36 and AngloGold Ashanti plc, you can compare the effects of market volatilities on 70082LAB3 and AngloGold Ashanti and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 70082LAB3 with a short position of AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of 70082LAB3 and AngloGold Ashanti.

Diversification Opportunities for 70082LAB3 and AngloGold Ashanti

0.24

Correlation Coefficient

70082LAB3  AngloGold Ashanti

Modest diversification

The 3 months correlation between 70082LAB3 and AngloGold is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding US70082LAB36 and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc and 70082LAB3 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on US70082LAB36 are associated (or correlated) with AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of 70082LAB3 i.e., 70082LAB3 and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between 70082LAB3 and AngloGold Ashanti

Assuming the 90 days trading horizon US70082LAB36 is expected to under-perform the AngloGold Ashanti. In addition to that, 70082LAB3 is 4.03 times more volatile than AngloGold Ashanti plc. It trades about -0.08 of its total potential returns per unit of risk. AngloGold Ashanti plc is currently generating about -0.02 per unit of volatility. If you would invest  2,384  in AngloGold Ashanti plc on March 7, 2024 and sell it today you would lose (33.00) from holding AngloGold Ashanti plc or give up 1.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	57.14%
Values	Daily Returns

US70082LAB36  vs.  AngloGold Ashanti plc

US70082LAB36

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US70082LAB36 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for US70082LAB36 investors.

AngloGold Ashanti plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AngloGold Ashanti may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with 70082LAB3 and AngloGold Ashanti

The main advantage of trading using opposite 70082LAB3 and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 70082LAB3 position performs unexpectedly, AngloGold Ashanti can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AngloGold Ashanti will offset losses from the drop in AngloGold Ashanti's long position.

The idea behind US70082LAB36 and AngloGold Ashanti plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.